General Motors expects to secure a contract worth more than $1 billion from the U.S. Army to produce light utility vehicles based on the Chevrolet Colorado ZR2 pickup truck. CEO Mary Barra said during the company’s second-quarter earnings call that, pending federal funding approval, GM plans to deliver 10,000 Infantry Squad Vehicles (ISVs).
GM Targets Major U.S. Army Vehicle Order
Barra told investors the anticipated order is expected to exceed $1 billion based on the U.S. Army’s procurement objectives.
The planned production would expand GM Defense’s work with the Army after the company won the ISV production contract in 2020, outperforming competing proposals from Oshkosh and Polaris. The Army initially ordered approximately 1,200 Infantry Squad Vehicles from GM Defense.
GM Defense Forecasts Revenue Growth
Barra said GM is concentrating on strengthening supply chain management, improving manufacturing readiness, and expanding production capacity to better serve the United States and its allies.
She added that GM Defense is expected to become a larger contributor to the company’s earnings over time.
According to Barra, GM Defense expects to generate $700 million in revenue this year and achieve double-digit profit margins over the next several years.
The announcement follows the Pentagon’s request earlier this year for GM and Ford to play a larger role in U.S. defense manufacturing.
GM Defense Expands Strategic Partnerships
In June, GM Defense announced a partnership with U.S. defense manufacturer Lockheed Martin. The collaboration aims to apply GM’s expertise in supply chain management, early-stage digital design, and commercial-scale production to help increase Lockheed Martin’s manufacturing capacity.
According to The Wall Street Journal, GM Defense is also a leading contender to build the replacement for the Humvee, a large Infantry Squad Vehicle for the U.S. Army.
Defense Business Continues to Grow
GM Defense also holds a 10-year contract with the U.S. State Department to produce next-generation heavy-duty armored sport utility vehicles for the Diplomatic Security Service.
“We’re building momentum with other products and customers, including the U.S. State Department and Secret Service, as well as Canada, Qatar, Brazil, and other allies,” Barra said.
She also said GM is supplying battery propulsion technology to Lunar Outpost, which won a $220 million NASA contract to develop the next-generation lunar terrain vehicle.
Automakers Increase Focus on Defense
The article noted that major automakers have increasingly expanded into the defense sector in recent months by announcing agreements involving military vehicles, anti-drone platforms, and weapons components.
Ford has entered discussions with the U.S. government and European defense departments regarding militarized versions of its F-Series Super Duty trucks. Meanwhile, VW Group has begun talks with Israeli state-owned company Rafael Advanced Defense Systems to manufacture components for air-defense systems at one of its German plants.
GM’s anticipated Army contract, along with its expanding defense partnerships and existing government agreements, highlights the company’s growing presence in defense-related manufacturing while awaiting approval for the proposed Infantry Squad Vehicle order.
